We, at Deloitte, have used this space several times to talk about the innovations that are affecting businesses, workers and even entire industries. We’ve talked about how robots are already taking over some HR functions; how businesses are borrowing liberally from the fields of science to improve their operations; how we all have to reconsider the way we develop talent in this age of big data.
Few, if any, sectors or functions are immune from the impact of advanced technology, and our practice of accounting and auditing is no exception.
Following the US Federal Aviation Administration’s issuance last year of new rules covering the commercial use of drones, an officer of the American Institute of CPAs (AICPA) said she expects the use of these unmanned aircraft to dramatically increase in the coming years, including that in the accounting profession.
Julia Morris, a project administrator for the AICPA State Regulatory and Legislative Affairs division, said firms such as ours may one day turn to drone technology to enhance routine audits or asset assessments. We can, for example, use a drone to fly over a client’s manufacturing plants and take pictures and the accurate measurements of these assets. We can also use a drone to check if workers at a client’s construction site are, indeed, complying with safety regulations in an effort to manage risk.
And these are just the possibilities with one specific technology.
For some time now, Deloitte has been investing in data analytics and artificial intelligence (AI) to enhance the effectiveness of its audit process.
The work of auditors involves a great deal of data acquisition, and once the data has been gathered, auditors follow structured processes and conduct rigorous checking to verify the accuracy of that data. This part of the audit process lends itself to automation, especially now that most, if not all, business records are kept in an electronic format and AI has gotten smarter, more sophisticated.
Machines can take over the time-consuming and tedious task of poring over purchase orders, payments, expenses and compensation, for example, to look for relevant information. Moreover, machines can go beyond what auditors typically do when gathering data, which is to take samples of populations.
With advanced technology, auditors can analyze all items in certain populations and, thereby, study the totality of a business, rather than just a cross section of it. Deloitte, for example, has a tool that automatically extracts contract provisions, allowing auditors to gather data at a faster rate and review more documents using less human labor.
Considering these benefits, it is no surprise that the market seems ready and eager to see the audit profession “go hi-tech” in its assurance work.
A Deloitte survey of more than 200 executives who are either involved in preparing financial statements or use these documents as part of their work revealed that virtually all respondents strongly agree that more advanced technologies should be used in audits. Another survey by the World Economic Forum, which looked into the tipping point for several technology-driven business changes, asked over 800 executives when they think AI will be performing 30 percent of corporate audits. Seventy-five percent of the respondents think this will be a reality by 2025.
If you are an auditor and these developments have you worried about job security, don’t be. As we’ve said again and again in this space, machines do not have to spell the end of the human worker. Instead, auditors can leverage these tools to get the grunt work done in a more efficient manner so that they can focus on what humans do best: carefully review the data, analyze it, and then render judgment backed up by years of knowledge and professional experience. That a drone or a robot helped you arrive at your conclusion is just an added perk of what is shaping up to be a hi-tech job.
The author is the Audit & Assurance leader of Navarro Amper & Co., the local member firm of Deloitte Southeast Asia Ltd. – a member firm of Deloitte Touche Tohmatsu Limited – comprising Deloitte practices operating in Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.